Fair Trade and Free Market

A copy of a letter to the editor for The Briefing Magazine, July 2008

I have a more radical application of economic theory to the coffee problem posed by Tony Payne in Up Front. (The Briefing July-August' 2008) Everybody give up coffee. If nobody consumes coffee then nobody will grow coffee. The farmers might be forced into some last ditch enterprise like growing food crops to feed their families.

I can joke about that because I don't drink coffee, or tea. But having been to CMS Summer School, I can't see this scheme working. So, instead, let me suggest why I disagree with Tony and why I think Fairtrade is worth a try.

Tony suggests (implicitly) that naïve consumers see the coffee market as nasty because it is a free market. The Fairtrade proponents have started up precisely because they believe rather the opposite. They argue that the price of coffee is kept artificially low by oppressive tactics of the big companies. If this can be established to be true, then Tony's economic theory arguments do not apply. Fairtrade may, in fact, restore the market to free trade.

Furthermore I would argue that Fairtrade coffee does not artificially prop up the price of coffee. I suggest Fairtrade adds a new quality, a new range to coffee buying - clear conscience. Not everybody will want this coffee variety. But those who do may be prepared to pay a premium. These buyers would not pay this premium, however, for ordinary coffee. So the possibility that this development will disrupt the whole market is, in my opinion, slim. If every coffee addict in the world however, came to prefer this coffee, then, the market would change, but it would still be a free market.

Finally however, my main disagreement with Tony is over his assertion early on that shopping choices are unlikely to have any effect on the problems on the other side of the world. My choices may seem unlikely to have any effect. But it's actually the only thing I can do. Sometimes self regulating industry bodies seem to do nothing, governments are all hands off these days (or hand in the till in some places). Global regulation has not even tried to keep up with globalisation. What else can I do but refuse to buy a shoe that was made in a sweat shop, prefer a coffee that doesn't grind workers into the dirt.

Lately, it has been asserted that Cote d'Ivore, the biggest producer of cocoa in the world has a significant proportion of it's cocoa grown on plantations using slave labour. Actual child slaves stolen from other countries. The industry is apparently going slow on efforts to prohibit this practice. It's just too complicated, you see. If this is true, then I do not want to be a part of it. The government seems unwilling or unable to take adequate steps to prohibit the practice. The chocolate industry seems unwilling to self regulate and develop a certification system. So what can I do? Only this. I will research this issue. And if I can be convinced that children are stolen, locked up, beaten and starved to make my chocolate I will pluck it out and throw it away. And if enough people do that and sales slump, then maybe the producers will take enough notice to begin the regulation process.

Rather than a feeble response, consumer choice is the only power I have in the market. In fact, it is what drives the market, especially when exerted collectively. I think ethical considerations should always be part of economic choices. As Charles Colson quotes Michael Novak, "Free, democratic capitalism is like a three-legged stool, supported by economic freedom, political freedom, and moral restraint." But I would go so far as to suggest that making ethical choices as a consumer is not only the only means I have to influence the producers on the other side of the world, it's also the right thing to do.

The great thing about organisations like Fairtrade is that they make it easy for me to do the right thing. They do the research, they have made it easy for me to buy coffee without oppressing the poor. That takes the uncertainty and time out of working out what to do in the supermarket aisle and poring over the internet. They give me more time to get on with what I want to do, Glorify God by proclaiming our saviour Jesus Christ.

Michael Hutton
Ariah Park Baptist Church
Ariah Park, NSW 2665